Trump administration launches process to replace tariffs struck down by U.S. Supreme Court

U.S. President Donald Trump’s administration on Wednesday launched a trade investigation into excess industrial capacity in 16 major trading partners in a move to rebuild tariff pressure after the U.S. Supreme Court tore down the centerpiece of Trump’s trade policy last month.

Canada is not named as one of the targets of the new probe.

U.S. ‌Trade Representative Jamieson Greer said the Section 301 unfair trade practices investigation could lead to new tariffs imposed against China, the European Union, India, Japan, Mexico and South Korea by this summer.

Other trading partners subject to the excess capacity probe include Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway.

Trump and his team have made clear they’re seeking to replace the hundreds of billions of dollars in lost revenues after the Supreme Court’s February ruling — which deemed that the president’s attempt to use an emergency powers law to enact tariffs was not valid — by using different laws to establish new levies.

Canada needs to just accept increased tariffs, U.S. says 

U.S. trade envoy Jamieson Greer says Canada needs to accept increased tariffs as part of any trade deal with the Trump administration, including a possible renewal of the Canada-U.S.-Mexico Agreement (CUSMA).

In this case, the administration is starting investigations under Section 301 of the Trade Act of 1974, which could eventually lead to new import taxes.

But in a Wednesday call with reporters, Greer said he didn’t want to prejudge the outcome of the process.

“The policy remains the same — the tools may change depending on, you know, the vagaries of courts and other things,” said Greer, stressing the goal was to protect American jobs.

Return of tariff drama

The start of the process to replace Trump’s prior tariffs could invite a return of the drama that rattled the global economy last year.

The since-overturned tariffs led to new frameworks with U.S. trade partners — and it’s unclear what impact a new set of import taxes could have on those agreements.

Greer said the new probes, long telegraphed by administration officials, should come as no surprise to trading partners and they should stick to their deals, although he stopped ​short of saying this would make them immune to all new Section 301 tariffs.

He said Trump was determined to pursue tariffs and “will find a way to deal with unfair trading practices. He’ll find a way ⁠to get our trade deficit down. He’ll find a way to protect U.S. manufacturing. We have a lot of tools to do it,” Greer said.

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Range of investigations planned

The government is looking for what it deems to be persistent trade surpluses and policies such as subsidies and the suppression of workers’ wages, among other factors.

The administration is also rolling out a Section 301 investigation to ban the import of goods made by forced labour.

Greer indicated there could be additional Section 301 investigations over issues such as digital service taxes, pharmaceutical drug pricing and ocean pollution, among other possibilities. The U.S. Commerce Department has separate trade investigations under Section 232 of the 1962 Trade Expansion Act.

There are timeline pressures to complete its investigations.

The administration has imposed 10 per cent tariffs on foreign-made goods under Section 122 of the 1974 Trade Act, but those expire on July 24. Trump said he planned to raise that import tax to 15 per cent, but he has yet to do so.

EU, Asian countries point to deals struck with U.S.

Bernd Lange, chair of the European Parliament’s trade committee, said Thursday that Washington’s ⁠launch ⁠of new Section ‌301 investigations into unfair trade practices had been expected, but “anything that departs in substance ⁠from the Turnberry Deal ⁠will ⁠not ​be acceptable.

European Parliament is still deliberating when to vote on the proposed trade deal struck last summer between the U.S. and EU in Turnberry, Scotland.

China said on Thursday the U.S. claim of overcapacity was a “false proposition” and that it opposed “political manipulation under ​this pretext.” Beijing is against all forms of unilateral tariff measures, Foreign Ministry spokesperson Guo Jiakun said at ​a regular news conference.

Taiwan’s cabinet said in a statement that the agreement on reciprocal trade it signed with the ⁠U.S. last month established consensus on multiple issues potentially covered by the Section 301 investigation. Similarly, Indonesia said its agreement with the U.S. remained the main guideline in bilateral trade relations. — The Associated Press